Bridges Sustainable Property Fund backs Castleoak
Bridges Ventures and care sector specialist developer, Castleoak, today announce that terms have been agreed for a development partnership involving an initial equity investment by the Bridges Sustainable Property Fund of £5 million.
The investment will be used in a joint venture arrangement to fund a series of pre-let Barchester Healthcare care home development projects which will be sourced, delivered and managed by Castleoak. The collaboration will initially see about 5 new care homes developed, with the prospect of additional investment to cover more projects. These form part of a wider development programme announced by Barchester recently.
Launched in November 2009, the Bridges Sustainable Property Fund invests in properties, either directly or in joint venture, in regeneration areas and where buildings show environmental leadership. It is an initiative of Bridges Ventures, an investment company whose commercial expertise is used to deliver both financial returns and social and environmental benefits.
Simon Ringer, Managing Director of the Fund, explains that the transaction offers the opportunity to invest alongside an experienced partner in a series of pre-let developments in a sector where there is a shortage of good quality accommodation to meet the needs of an ageing population.
Simon Ringer today, commented:
“We pride ourselves on working closely with high quality companies. Castleoak’s reputation and long-term experience combined with the fundamental strength of the care sector, where income will be derived from such a strong covenant, made this a very attractive proposition. We see our investment as producing positive results on a number of fronts. We believe our investors will benefit from attractive financial returns through both development profits and strong income returns. The investment also provides an excellent opportunity to demonstrate environmental leadership in the design and construction of buildings which typically have high energy use requirements.”
The first two sites have been acquired by Castleoak for construction starts in 2010, with several more under negotiation. The care homes will be pre-let to Barchester Healthcare Homes Limited on a long term lease with an option to purchase the freehold within the first four years.
Although project details will vary from scheme to scheme, the standard model will focus on homes with between 60 and 75 bedrooms with Barchester’s usual emphasis on high quality and designs that will be well in excess of national minimum standards. To qualify for funding under the joint venture, each development will need to feature construction and energy management initiatives which maximise environmental impact and demonstrate environmental leadership.
This is one of several funding streams that Castleoak has negotiated to facilitate its overall development programme. Speaking about the collaboration with the Bridges Sustainable Property Fund, its Executive Chairman, Mel Knight, said:
“In the last few years, we have established a very active development business alongside our design and construction company and are delighted that our longstanding relationship with Barchester is being extended to cover both. This funding agreement not only gives us access to an important additional source of funding but also to an experienced and highly respected team that places a premium on quality and environmental leadership. The values promoted by the Bridges Sustainable Property Fund fit very well with our company values. This partnership creates the opportunity to make a positive difference not only by providing first class care accommodation, but also by helping to demonstrate how new care homes can respond to the environmental agenda.”
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Please contact Annabel Lloyd or Jonathan Smith on 029 2054 8800
Notes to Editors:
The Bridges Sustainable Property Fund is managed by Simon Ringer, Managing Director, Sustainable Property Fund, with the assistance of an investment committee comprising John Harrison, co-founder of MWB Group Plc, John Duggan, formally CEO at Gazeley Limited, and Philip Newborough, Michele Giddens and Rory Maw of Bridges Ventures. Simon has worked in the property industry for over 20 years with a focus on fund management whilst at PRICOA Property Investment Management (now Rockspring), and as a Director of Charterhouse Bank (now HSBC) having created and managed its property fund management business and a variety of funds and joint ventures whilst at Jones Lang LaSalle Corporate Finance.
Bridges Ventures is an investment company established in 2002 as a fund manager with a social mission whose commercial expertise is used to achieve social or environmental aims as well as attractive returns for investors. Within its existing venture capital funds, Bridges Ventures has already invested in a number of highly successful property-backed businesses in regeneration locations and sustainable buildings.
Bridges Ventures manages three types of funds, all of which seek social / environmental benefit as well as financial returns: Venture Funds I & II, the Sustainable Property Fund and the Bridges Social Entrepreneurs Fund. Venture Fund I totaled £40m while Venture Fund II totaled £75m, beating its original target of £50m by 50%, and was closed in 2007. Investors in the second fund include HSBC, Co-operative Financial Services, Barclays Business Banking, Lloyds TSB, and Citigroup, individuals including Tom Singh of 3i, Dr Mike Lynch of Autonomy Corporation, Harvey McGrath of Man Group and Lloyd Dorfman of Travelex, as well as pension funds and endowments including the Universities Superannuation Scheme, the West Midlands Pension Fund and All Souls College.
The Venture Funds invest in businesses based in regeneration areas and in sustainable business sectors such as the environment, education and healthcare. To date, almost 50% of the funds have been invested in property-backed businesses. Bridges Ventures typically invests up to £10m at a time in ambitious, entrepreneurial businesses including early stage, development capital and management buy-outs. So far, £60m has been invested in 31 companies, many of whose employees have come out of long-term unemployment. To date there have been five successful exits: Harlands in Hull, SimplySwitch in South London, HS Atec in Yorkshire, EB2 in South London and IDL in Bournemouth.
Bridges Ventures’ key backers include Sir Ronald Cohen, co-founder and former chairman of Apax Partners, 3i and Doughty Hanson.
In August 2009 the Bridges Ventures Charitable Trust launched the Bridges Social Entrepreneurs Fund which provides an innovative financing solution that is tailored to the needs of ambitious social enterprises. The fund has so far raised £8.5m from The Office of the Third Sector, NESTA, Sir Ronald Cohen, Nigel Doughty, Harvey McGrath, Apax Foundation, The Generation Foundation, Lehman Foundation, Deutsche Bank and the Esmée Fairbairn Foundation. The Bridges Ventures team have also allocated funds from their profit share. The fund invests in the form of equity-like capital, which shares in the risks but also the returns of social enterprises. Investments are coupled with hands-on advice and support to help the social enterprises realise their potential.
For more information please go to www.bridgesventures.com
Established in 1984, Castleoak is the pre-eminent name in development, design and build within the care sector, and has built nothing but care accommodation since 1996.
We work across the UK in partnership with a range of not-for-profit and commercial care organisations. To date, we have built over 130 homes, delivering over 7,500 care bed spaces, and more than 1200 independent living units. We provide customers with complete turnkey solutions, from inception to furnishing and equipping, as well as a range of development services, including joint ventures and funding.
Castleoak Group Raglan House, Cardiff Gate Business Park, Cardiff, CF23 8RA www.castleoak.co.uk
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